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Uniqlo, S.Oliver Under Fire in FLA Complaint Charging ‘Wage Theft’ Versus Garment Workers

Uniqlo-owner Fast Retailing and German brand S.Oliver are facing a complaint filed with the Fair Labor Association (FLA) for failing to pay workers in Indonesia $5.5 million in outstanding severance payments after two factory suppliers “closed down overnight.”

Lodged by workers-rights consortium Clean Clothes Campaign on behalf of workers of the Jaba Garmindo factory group, the complaint accuses Fast Retailing and S.Oliver of violating the FLA’s “principles of fair labor and responsible sourcing,” which the labor-monitoring group drafted to ensure the “respectful and ethical treatment of workers” while promoting “sustainable conditions” in the garment industry.

In 2015, two factories in the towns of Cikupa and Majalengka shuttered following the sudden bankruptcy of the Jaba Garmindo factory group, which the Clean Clothes Campaign says occurred after its major buyers—most significantly Uniqlo and S.Oliver, which retained 50 percent of factory production in 2014—withdrew their business. The thousands of mostly female workers employed by the group received no hint that the company was in financial straits, the organization said. Instead, they learned of the bankruptcy and factory closures through media reports.

Court documents obtained by Clean Clothes cite the business practices of buyers as a major contributor to the factories’ demise. Workers also testified that Uniqlo held outsize influence over factory production and working conditions, which led to “sky-rocketing” targets, forced overtime and increased work pressure.

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“It is plainly unjust that workers who made Uniqlo clothes suffer needlessly, while the Uniqlo brand continues to grow and thrive, generating billions in profits,” Nurhayat, vice chairman of the labor union FSPMI and a former Jaba Garmindo employee, said in a statement. “We earned the right to the money we are owed over years of working hard to make Uniqlo clothes. To refuse to pay us is tantamount to wage theft and that should be sufficient cause for the FLA take immediate action.”

As FLA affiliates, Uniqlo and S.Oliver must adhere to FLA’s code of conduct, which “clearly states” that companies must ensure their suppliers safeguard workers’ rights under national and international labor and social security laws and provide legally mandated compensation where applicable, the Clean Clothes Campaign said. Because the brands have declined to participate in any “serious mediation process,” the organization calls the FLA one of the workers’ “last available mechanisms for remedy.”

“Uniqlo keeps saying it has no legal obligation to pay what is owed to the Jaba Garmindo workers, and that is exactly the problem—there is a legal accountability vacuum in the garment industry,” said Mirjam van Heugten from the Clean Clothes Campaign. “The codes of conduct that many brands refer to when it comes to labor-rights issues are voluntary and workers far too often have to rely on a brand’s goodwill to uphold their responsibility as outlined in international norms and standards. We expect the FLA to give real meaning to the promises made to workers in its code of conduct and ensure full remedy for the Jaba Garmindo workers.”

The Jaba Garmindo workers’ complaint to the FLA arrives only weeks after Uniqlo announced its partnership with the International Labour Organization’s (ILO) largest private-sector-funded project to promote social protection, skills development and employment support in Indonesia. In June, Fast Retailing unveiled a partnership with United Nations Women to “champion women’s rights and empowerment in the apparel industry.” Eight out of 10 of the former Jaba Garmindo workers are women, the Clean Clothes Campaign notes, and at least 600 of them have been reduced to extreme financial hardship because of the factory closures.

“What is being asked of these brands is not exceptional,” Artemisa Ljarja, urgent appeal coordinator at Clean Clothes Campaign’s Germany arm, said. “What is unusual is the full out refusal of these brands to act in line with this emerging industry standard and step up and pay what is owed to these workers.”

Uniqlo, she said, should not be able to “buy credibility” through its partnerships with the ILO and UN Women while “simultaneously ignoring the voice of thousands of women workers whose labor made them one of the most profitable brands in the world.”

“Now it is up to the FLA to ensure these brands are held accountable for the promises they made to respect garment workers’ rights in their supply chain,” Ljarja added.